McLaughlin moved to Championship club Forest from Derry City in January 2013, but he struggled to make a huge impact at the City Ground.
The Irishman had spells on loan at Bristol City, Notts County and Southend over the past two or so years.
Having impressed at Southend last season, the 25-year-old has joined Phil Brown’s side side on a permanent contract.
The Seasiders finished fifth in League Two during the 2014-15 campaign and got promoted to League One via the playoffs.
Southend are fourth from bottom in the League One table at the moment, having picked up just two points from four matches.
Meanwhile, Forest find themselves 11th in the Championship standings at the moment with five points from four matches.
Following his move to Southend, McLaughlin took to Twitter to express his delight, with Forest fans responding.
@stephenmac15 good luck mate,you show em ,sorry to see you go ,I believe you have something about you !— chris morley (@dimholtroad) August 28, 2015
@stephenmac15 best of luck fella gutted to see one of the Irish contingent leave the Forest but hopes it works out for you down south!— Colm Kavanagh (@ColmKavNffc) August 28, 2015
@stephenmac15 best of luck. Sorry you never got a real go at forest. I always thought you did pretty well when you got on!— pete rivis (@peterivis) August 28, 2015